RIL’s oil-to-chemicals biz spinoff will get Sebi, exchanges approval

Reliance Industries Ltd has acquired approvals from Sebi and inventory exchanges to switch its refining, advertising and petrochemical (oil-to-chemicals) companies to a wholly-owned subsidiary, Reliance O2C Limited. While RIL will retain 100 per cent of the O2C subsidiary, its stake within the retail enterprise (Reliance Retail Ventures) will likely be 85.1 per cent and 67.3 per cent stake in Jio Platforms, it stated in an investor presentation.
The switch will likely be on a “slump sale basis”, topic to attaining the requisite approvals. The consideration for the switch will likely be within the type of long-term interest-bearing debt of $25 billion to be issued by O2C to RIL.
The firm now requires the approval of fairness shareholders and collectors, regulatory authorities, and the income-tax authority, moreover the National Company Law Tribunals (NCLTs) in Mumbai and Ahmedabad. RIL stated the approval course of is predicted to be accomplished by the second quarter of the 2021-22 monetary yr. In the presentation to buyers, RIL stated that the creation of this subsidiary would facilitate worth creation by means of strategic partnerships and entice devoted swimming pools of investor capital.
RIL’s exterior debt is proposed to stay with RIL solely. As RIL strikes its oil refining, petrochemical and 51 per cent stake in a gas retail subsidiary — amongst different companies — to O2C, it can proceed to carry companies like textiles and upstream oil & gasoline, and can act as an incubator for brand new development companies.

The proposed reorganisation eases the formation of strategic partnerships and stake gross sales to potential buyers focussed on inanagement management vestments in oil-to-chemicals companies. RIL has been in ongoing discussions with Saudi Aramco to promote a minority stake in its oil-to-chemicals companies, which, if profitable, ought to result in additional deleveraging of RIL.